When you wish upon a czar...

...makes no difference who you are

anything your heart desires

will come to you
-Peter Pan

I'm not sure who wished for the car czar first, but I'm willing to bet they won't get their heart's desire. I'm not expert in these things, but it just strikes me as a bad idea.

I'm going to sound Republican here, but stick with me. One of the follies of government is that it thinks it can fix everything itself, and two of Washington's favorite fix-it remedies are the commission and the czar. One buys time, and the other shifts accountability. Both tend to waste time and money.

The latest fix for the car industry is that we hand them a $14 billion check (the term officially morphed from bailout to bridge loan) that will come with a nanny to help the car companies make better decisions. No one can argue that automakers have some serious decision-making challenges...after all, these are the guys who make cars so crappy that they didn't even want to drive them to Washington. Only when they thought $25 billion...oops, I meant $34 billion, was at stake did they buckle up for the road trip. I'm not mad at them. It'd take about that much to get me to drive one, too.

So these guys who stunk at making decisions and drove their companies into the ditch, now beg us for a bailout, I mean bridge loan. We can't just hand them the money. We need some checks and balances. We need.... A CZAR. Here are four problems with the czar idea:

1) No business in government: Government doesn't think or operate like the private sector. Like it or not, the engine of business is capitalism. Companies are driven by competition and profits. We measure success by money and stock value. That's it folks. There is no other real report card for business as a whole. Government doesn't think that way. They are egalitarian. They are looking out for the greater good. To make everything right for the taxpayer. To establish justice. To ensure domestic tranquility. To provide for the common defense. To raise their poll numbers. Chrysler has a different agenda; they want to kill GM. They don't want the same opportunity as their competitor. They want a better one. That's the nature of business, and government doesn't get that. That brings me to my second reason.

2) The friend of my enemy: This one czar will open up the books of both companies to decide who needs and gets help...or how they should negotiate deals..or restructure loans?? That ought to make them both shudder. Companies guard their inner workings like Fort Knox because a leak in their strategic direction or technologies can set them back years in market share and profitability. Now you'll have the same guy/office poring through your books as well as your competitors. Can you ever trust that process, no matter how much they say it's safe? Did the mob ever trust the witness protection program? I know the government is there to help but please... That brings me to the third reason.

3) Money where your mouth is: The czar has no real stake in the outcome. Other than being able to add "successful car czar" to his or her resume, there will be no lasting impact like his job lost or her stock value plummeting. If the whole experiment fails, the czar will write a book and go nurse his or her credibility back to health in a think tank. People who were at his mercy will languish with the results. If you want to call the shots, you need some skin in the game. That brings me to my last reason.

4) It's not who you know, it's what you know: Will this person be required to have auto industry experience? What metrics will we use to determine Mr. or Ms. Czar's success? Do you really want the same guy who picked Mike "Brownie" Brown to run FEMA choosing someone to navigate Detroit through its storm? Would you be more inclined to buy a car from a Detroit company because a Washington suit was calling the shots? I think we all know the answer to that one.

Now you're thinking...we just can't hand money to auto execs with no accountability, can we? No we shouldn't, but accountability doesn't require us to micromanage the process. When a bank loans you money for a car, they don't send someone to the car lot with you to make sure you don't by a Buick with high mileage, but when the transmission falls out, you're on your own.

A guy named Arnold Berk spent $15,000 of his own money to place an ad with his proposal for "A Contract between Main Street and Wall Street." He has a couple provisions that tie very real accountability and consequences to any government help. Here's my favorite:

The CEO and top 25 officers must pledge their personal real estate as collateral for this loan. This includes property held jointly with spouse. Their principal residence as well as any other real estate they may own as an individual or with spouse.

No need to hire a czar when a guy's house is at stake. Now that's not just accountability, that's motivation. Go ahead and fly to Washington while we measure for drapes. You think that would get their attention?

But... we wish for a czar to build our cars. As one analyst commented, "that only delays the funeral."

If your heart is in your dreams
No request is too extreme
When you wish upon a czar
As dreamers do
-Peter Pan

Brother, can you spare a bailout? A conspiracist’s guide to the current crises

The line is beginning to form for those taxpayer bailout dollars. You mean you haven't heard? Say your business or industry isn't going very well. You're on the verge of losing everything if you don't do something drastic. What do you do? Let things go south and head to the government for a bailout.

It worked swimmingly for the banking and investment industries. They were on their way down the tubes. They weren't running out of money, mind you. They had plenty of cash, but we had a crisis looming they told us. Our homes were losing value, said the banks who helped determine the value most of them. Our stocks were going south, said the investment community who administered them. We don't have the confidence to loan to each other, said the banks who controlled loaning decisions.

What we need is cash, they gravely intoned. Lot's of it. Your cash. We won't lend you money, but we want you to lend us some. What a great idea! And so Congress, who funds their campaigns with donations from rich people like bankers and stock brokers went along. Things must be fixed. A crisis like this deserves all our attention, they cried in unison. More rapid than eagles, the statements they came. They forecast the doom and decried the shame.

The masses panicked on cue. Yes, give them our money, so they might loan it back to us. Write them a check with no collateral after they squandered theirs in a dramatic display of fiscal irresponsibility. Yeah. Let's give them $750 billion. Wait, they need $250 billion more. They couldn't have really asked for a trillion, could they? That would choke even the most concerned observers. How about we get that trillion it in two easy payments?

Whoa! The auto industry said. You mean you can run your industry into the ground and get some bailout cash? We want some of that action. Quick, let's don our long faces and swoop into Washington. How brilliant of us. Sure congress will initially castigate us and our management ability, but how bad can we be if we can score some of this cash. We'll then collude with the banks to charge high interest rates, and we can both make back this money and then some. Sweet.

But the knucklehead auto industry execs couldn't even get the begging right. We all had a good laugh that they flew into town on corporate jets whisking congressional testimony that told us how the bankrupt and begging companies had been so well managed. They make great cars. They have savvy managers. They employ efficient workers. It wasn't anybody's fault. Nobody in Detroit, anyhow.

Then they slipped congress the ransom note. Give us the money or the Detroit workers get it. Congress considered the demand but quickly realized they should feign some level of outrage and concern. Lawmakers sent the execs back to Michigan with some homework. Come back in December and bring us some political cover for goodness sakes. Do we really need to explain that to you?

The airline and travel industries looked on, green with envy. Our industries are going broke, too. We employ lots of Americans, too. Let's see what happens with the Detroit brethren. In the mean time, somebody write a ransom note.